China Issues Fine of 362 Million Yuan for Pharmaceutical Monopoly Claims
Published 19 June 2025
Fei Dang
On June 13, 2025, the State Administration for Market Regulation (SAMR) announced a major typical monopoly case in the pharmaceutical field, which imposed a fine of 362 million yuan upon four companies, as well as legal liabilities to persons who are responsible for entering into monopoly agreements in accordance with the law.
According to the news release from the SAMR, upon designated jurisdiction by the SAMR, the Market Regulation Bureau of Tianjin Municipality opened an investigation of the case in April 2024. Upon investigation, starting from November 2021, an individual named Guo, through communication and liaison, organization of gatherings, field visits, and other means, discussed raising the price of dexamethasone sodium phosphate API with the relevant personnel of four enterprises (Jin Yao Pharmaceutical Co., Ltd., Zhejiang Xian Ju Pharmaceutical Co., Ltd., Jiangsu Lianhuan Pharmaceutical Co., Ltd., and Xi'an Guokang Ruijin Pharmaceutical Co., Ltd.) and reached a verbal agreement to stop the price competition and increase the price together. The said four enterprises then synchronized to stop supplying, which resulted in a tight supply in the market, and jointly raised prices in accordance with the verbal agreement. From February 2022 to March 2024, the four enterprises increased the sales price of dexamethasone sodium phosphate API from RMB 8,000/kg to RMB 13,000/kg, which excluded and restricted market competition, caused the price thereof and related preparations to rise, and damaged the legitimate interests of consumers and the public interests of the society.
In accordance with Article 56 of the PRC Antimonopoly Law, “where an operator enters into and implements a monopoly agreement in violation of the provisions of this Law, the antimonopoly enforcement agency shall order the cessation of the illegal act, confiscate the illegal income, and impose a fine of not less than one percent and not more than ten percent of the sales volume of the previous year, or a fine of not more than five million yuan if there was no sales volume in the previous year; if the monopoly agreement reached has not yet been implemented, a fine of not more than three million yuan may be imposed. If the operator's legal representatives, principals, and persons directly responsible are personally liable for reaching a monopoly agreement, a fine of not more than one million yuan may be imposed.”
Accordingly, the Market Regulation Bureau of Tianjin Municipality made an administrative punishment decision in accordance with the relevant law, that is, “a maximum fine of 5 million yuan was imposed upon the individual Guo; the confiscation of the illegal gains of the four enterprises and a fine of 8% of their previous year's sales respectively, totaling 355 million yuan; and a fine of 600,000 yuan each imposed upon the four persons personally responsible for the monopoly agreement reached by the four enterprises.”
As a major typical monopoly case in the field of pharmaceuticals, this case achieved a triple punishment for the enterprise, the organizer, and the responsible person in terms of punishment. Not only did it impose severe financial penalties on the enterprise involved in the case, but it also imposed a maximum fine of 5 million RMB on the individual Guo, who had organized the monopoly agreement, and imposed a fine of 600,000 RMB on each of the four persons who were personally liable for the monopoly agreement. These penalties not only reflect the anti-monopoly law enforcement authorities to crack down on monopoly behavior but also help to serve as a warning to pharmaceutical enterprises, enhance the compliance awareness of the relevant enterprises, and regulate the order of the pharmaceutical market.
According to the news release from the SAMR, upon designated jurisdiction by the SAMR, the Market Regulation Bureau of Tianjin Municipality opened an investigation of the case in April 2024. Upon investigation, starting from November 2021, an individual named Guo, through communication and liaison, organization of gatherings, field visits, and other means, discussed raising the price of dexamethasone sodium phosphate API with the relevant personnel of four enterprises (Jin Yao Pharmaceutical Co., Ltd., Zhejiang Xian Ju Pharmaceutical Co., Ltd., Jiangsu Lianhuan Pharmaceutical Co., Ltd., and Xi'an Guokang Ruijin Pharmaceutical Co., Ltd.) and reached a verbal agreement to stop the price competition and increase the price together. The said four enterprises then synchronized to stop supplying, which resulted in a tight supply in the market, and jointly raised prices in accordance with the verbal agreement. From February 2022 to March 2024, the four enterprises increased the sales price of dexamethasone sodium phosphate API from RMB 8,000/kg to RMB 13,000/kg, which excluded and restricted market competition, caused the price thereof and related preparations to rise, and damaged the legitimate interests of consumers and the public interests of the society.
In accordance with Article 56 of the PRC Antimonopoly Law, “where an operator enters into and implements a monopoly agreement in violation of the provisions of this Law, the antimonopoly enforcement agency shall order the cessation of the illegal act, confiscate the illegal income, and impose a fine of not less than one percent and not more than ten percent of the sales volume of the previous year, or a fine of not more than five million yuan if there was no sales volume in the previous year; if the monopoly agreement reached has not yet been implemented, a fine of not more than three million yuan may be imposed. If the operator's legal representatives, principals, and persons directly responsible are personally liable for reaching a monopoly agreement, a fine of not more than one million yuan may be imposed.”
Accordingly, the Market Regulation Bureau of Tianjin Municipality made an administrative punishment decision in accordance with the relevant law, that is, “a maximum fine of 5 million yuan was imposed upon the individual Guo; the confiscation of the illegal gains of the four enterprises and a fine of 8% of their previous year's sales respectively, totaling 355 million yuan; and a fine of 600,000 yuan each imposed upon the four persons personally responsible for the monopoly agreement reached by the four enterprises.”
As a major typical monopoly case in the field of pharmaceuticals, this case achieved a triple punishment for the enterprise, the organizer, and the responsible person in terms of punishment. Not only did it impose severe financial penalties on the enterprise involved in the case, but it also imposed a maximum fine of 5 million RMB on the individual Guo, who had organized the monopoly agreement, and imposed a fine of 600,000 RMB on each of the four persons who were personally liable for the monopoly agreement. These penalties not only reflect the anti-monopoly law enforcement authorities to crack down on monopoly behavior but also help to serve as a warning to pharmaceutical enterprises, enhance the compliance awareness of the relevant enterprises, and regulate the order of the pharmaceutical market.